Property returns halve on softer market

The office market has seen vacancy rates rising due to over supply. PIC: KAGISO ONKATSWITSE
The office market has seen vacancy rates rising due to over supply. PIC: KAGISO ONKATSWITSE

Total returns in the investment property sector halved to 11.5 percent in 2014 down from 21.5 percent in 2013 on the back of a weaker market.

According to the IPD Annual Property Consultative Index released yesterday, the total return was underpinned by a relatively stable income return of 9.4 percent while capital growth slowed significantly to 2.0 percent from 10.2 percent the year before.

Total returns represent and aggregation of  income plus capital growth with the former reflecting increase in rentals while the latter denotes revaluations of properties.  

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